Colorado City teachers to finally get checks cashed

COLORADO CITY, Ariz. — Teachers and staff members of the Colorado City Unified School District finally will be able to cash their paychecks now that a state school insurance company has agreed to honor the district's payroll warrants.

District employees can now endorse their payroll checks over to the Arizona School Risk Retention Trust, which will then honor the checks and hold the warrants for future payment by the school district.

"With Federal Express, we're able to have a two-day turnaround so the employees can get their money," district superintendent Alvin Barlow said during a school board budget hearing this past week. "That's not addressing the checks to vendors and some of the payroll deductions."

Those creditors must wait in line for payment until the district's warrants are once again honored and begin flowing normally. That likely won't happen until the insurance trust reaches an agreement with the district's bank to honor payroll warrants it is already holding, the school board learned.

Payroll checks began to bounce in mid-October after the school district maxed out its credit limit at Wells Fargo Bank and expected federal funds were slow in arriving, said Jeffrey Jessop, the district's business manager.

"The bank is still rigid in its position that the entire credit line must be paid off before allowing payroll warrants to be paid," said Jessop, who is hopeful the bank will relax its position.

A local business owner had offered to purchase some of the payroll warrants, although one teacher said the offer wasn't on a dollar-for-dollar basis. The district is in financial difficulties for several reasons, Jessop said, which include a declining enrollment and poor tax base.

State funding, provided through the rapidly declining enrollment fund program, helped keep the Colorado City school system running for those remaining students, said Jessop. But a legislative change in the funding formula will cost the district at least $70,000 this year, adding to the district's worries.

And while estimated revenues for the school district in 2004-05 are about $5.6 million — a slight bump over last year's budget of $5.4 million — some of those funds are based on a nearly threefold increase in property taxes imposed by the school board.

"For this year (the property tax) is an increase," said Jessop. "It was necessary this year in order to keep up with the state's equalization formula so we could get state aid."